European Affairs

Debate between Hilary Benn and Jim Cunningham

Wednesday 14th March 2018 Commons Chamber

[Hilary Benn (Leeds Central) (Lab)]

I apologise for not being able to be present for the conclusion of the debate tomorrow.

We should be very grateful that we have the opportunity over two days to discuss European affairs, but it is a reminder that there is one thing Ministers do not want us to be doing, which is voting on any amendments to keep us in a customs union. This is definitely going to be remembered as the Brexit Parliament. It is undoubtedly the Back Benchers’ Parliament. At the moment, it is running the risk of becoming the voteless Parliament, because business managers are scrambling around to fill the time with anything other than votes on important matters. Ministers are not going to be able to put those votes off permanently.

One of the reasons that there is so much support for the idea of remaining in a customs union was alluded to by my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) in his excellent opening speech, and that is that it would provide part of the solution to the problem of the border between Northern Ireland and the Republic, which continues to rumble unresolved under the surface of the Brexit negotiations.

The truth is that the House divides into two camps on the subject of the border. There is one view that says, “It’s all right,” because there will be a technological solution that will get around the incompatibility between the policy the Government have adopted, with the very high bar they have rightly set of no checks, no infrastructure and an open border, and their determination to leave the single market and the customs union at the same time. The second view, which I share, is that we cannot currently see how those two contradictions can be resolved.

We have been taking evidence in the Select Committee on Exiting the European Union and looking at free trade agreements all over the world. Every single one of them—every single one—involves some checks on some goods. It does not matter whether it is Norway and Sweden or Canada and the United States of America. Even the much quoted but clearly little read by its proponents European Parliament report “Smart Border 2.0” acknowledges that, even with the most up-to-date technology, there would still need to be physical infrastructure, which is not compatible with maintaining an open border. Of course, the Government published their two documents last summer and we should explore all the options. I recognise that the suspension of belief is essential to the magician’s art, but it is not a very sound foundation for Government policy.

Although we are none the wiser about what is going to happen in Northern Ireland, we did learn, in fairness, a bit more about the Prime Minister’s approach in her Mansion House speech. Despite all the advance briefing about ambitious managed divergence, which I hope has now disappeared into the dustbin of history, the Prime Minister did speak a great deal about maintaining regulatory alignment. I welcome that.

The other thing that was striking about that speech was the frankness with which the Prime Minister acknowledged that we will inevitably have less access to our most important market, compared with what we have at the moment. It has taken a long time to get to this point of realism. Who remembers “We’re going to get the exact same benefits,” which was the Secretary of State’s cry for many months?

The truth—that we are going to have less access—is the reason why the pound fell after the referendum. It is why the UK has gone from being one of the fastest growing of the world’s advanced economies to the slowest, which has just been confirmed. The question remains for the House: what is the right approach to manage the risks of damage to the British economy as the process unfolds?

I think we all agree that continuing tariff-free trade is essential, and I simply say that the most effective way of achieving that would be to remain in a customs union with the European Union. We have heard from the Minister that 43% or 44% of our exports go to this market, and a further 17% go to countries with which we have trade agreements. It would be great if, in responding today, the Minister could confirm how the Government are getting on with ensuring that those agreements will roll over during the transitional period, so that businesses know the terms on which they will trade.

[Mr Jim Cunningham (Coventry South) (Lab)]

My right hon. Friend has touched on the issue of businesses. Companies such as Jaguar Land Rover in my constituency do not know where they are in relation to regulation of research and development, and there is nothing forthcoming from the Government on that.

[Hilary Benn]

My hon. Friend is absolutely right, and that is one of a whole host of examples that Members on both sides of the House are aware of. Businesses in our constituencies are asking how it is going to work, because at the moment we do not know.

Staying in a customs union is what the CBI wants, and I am afraid that the Government’s policy on international trade is one of Micawberism. Given the fondness of the President of the United States for punitive tariffs and the clear desire of the American Administration to open up our agricultural market, which is not what the Environment Secretary said he wants, do we really think that concluding a trade agreement with the US is going to happen any time soon? Do we really think we are going to get a trade deal with India before we have agreed to give more visas to its citizens?

The Minister for Trade Policy who opened the debate is no longer in his place, but the idea that being in the European Union has somehow stopped us trading with the rest of the world is nonsense. If that were the case, how is it that our largest single trading partner in the world is a country with which we do not have a trade agreement—the United States? If that is the case, why is it that our trade with China has increased by 64% since 2010 and China is now our fifth largest trading partner?

Having said all that, there are areas in which the European Union needs to show greater flexibility in the negotiations. It has done particular, different or special deals with its external partners—Canada, Norway, Ukraine, Switzerland and Turkey. Let us take the example of our continued participation in EU agencies, which are very important to business and therefore to trade. When the Prime Minister mentioned the European Aviation Safety Agency, the European Medicines Agency and the European Chemicals Agency, the European Union’s response—basically, “No. You can’t take part. They’re the rules. Forget it!”—was spectacularly ill-judged.

We should say to all those we speak to in Europe, “Now, come on. You could have said, ‘Let’s sit down and talk about how we can do this, but you’ll have to pay, you’ll have to abide by the rules and you’ll have to accept judgments of the European Court of Justice.’” Such an approach should not be a problem for the Government because, in the Prime Minister’s speech on security in Munich, she said that to maintain co-operation on security, we would accept the remit of the ECJ. That is another example of reality beginning to dawn on the red lines of the Government’s policy.